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CIRCULAR No. 67/1999/TT-BTC OF JUNE 7, 1999 GUIDING THE USE OF CAPITAL AND THE ACCOUNTING OF PRINCIPALS AND INTERESTS OF THE GOVERNMENT BONDS FOR NATIONAL CONSTRUCTION AT THE ENTERPRISES

In furtherance of the Government�s Decree No. 34/1999/ND-CP of May 12, 1999 stipulating the issuance of the 1999 government bonds for national construction, the Ministry of Finance issued Circular No. 56/1999/TT-BTC on May 12, 1999 guiding the implementation of such Decree.

Particularly for the enterprises, the Ministry of Finance hereby provides the following additional guidance:

1. For the State enterprises, Circular No. 56/1999/TT-BTC of May 12, 1999 that: "the State enterprises must not use the State budget capital and funds to purchase government bonds" shall be understood as: the State enterprises must not use the money allocated by the State budget for the performance of their public-utility tasks, for national reserve, reserves for price stabilization or capital for achievement of other designated objectives of the State which has been allocated by the competent agencies for the purchases of government bonds.

The State enterprises may use the capital under their management to purchase government bonds as stipulated in Article 7 of the Law on the State Enterprise and Article 10 of the Government�s Decree No. 59/1999/ND-CP of October 3, 1996 on the Regulation on financial management and business cost-accounting applicable to State enterprises.

2. All government bonds purchasers specified in Article 2 of the above-said Decree No. 34/1999/ND-CP (including the enterprises of all economic sectors) shall be exempt from tax on income generated from the national construction government bonds� interest.

3. The government bonds� interest amounts shall be accounted into the annual financial operation income of the enterprise (particularly for the commercial banks and credit institutions, such amounts shall be accounted into their turnovers) according to the following formula:

Total government bonds� The number of months

Annual principals x 50% (interest rate) during which capital

collected = ������������� x is used for the purchase

interests 60 (months) of government bonds

in the year

The difference resulting from the actual inflation rate in five years plus (+) the prescribed five-year interest rate, which is higher than 50% and additionally repaid by the State, shall be accounted into the last year�s income.

The interest The interest The interest amounts

difference due = amounts - already accounted

to inflation actually repaid through five years

4. The government bonds� principals and interests shall be accounted as follows:

a/ When the government bonds are purchased, the accountants shall inscribe:

Debit: Account 221- Long-term securities investment (2212)

Credit: Accounts 111, 112...

b/ The government bond annual interest amounts and those of the last year shall be book-entered on December 31st annually, inscribing:

Debit: Account 221 - Long-term securities investment (2212)

Credit: Account 711 "Income from financial operations".

The enterprises shall open specific accounts for monitoring the government bond interests.

c/ When the State repays the government bonds, the actually repaid government bonds principal and interest amounts shall be inscribed as follows:

Debit: Accounts 111, 112,...

Credit: Account 221, Long-term bond investment (2212).

Annually, the enterprises shall have to contribute expenses for capital mobilization and other expenses (if any) with regard to capital used for the purchase of government bonds into the financial operation expenses (or business expenses, for commercial banks and the credit institutions, such as: the interest payable to the capital mobilizees), in order to determine the actual profit of this operation.

5. This Circular takes effect 15 days after its signing.

For the Minister of Finance

Vice Minister

TRAN VAN TA